sectorwatch: value-added resellers

March 2021

Sectorwatch:Value-Added Resellers

7 Mile Advisors

Value-Added Resellers

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only inconjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document.All data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor7M Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treatedas confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error.

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OverviewDASHBOARD

PUBLIC BASKET PERFORMANCE

VALUATION COMPARISON

RECENT DEALS

• Summary metrics on the sector

• Commentary on market momentum by comparing the

most recent 12-month performance against the last 3-

year averages.

• Summary valuation and operating metrics for a basket of

comparable public companies.

• Graphical, detailed comparison of valuation multiples for

the public basket.

• The most recently announced deals in the sector

We advise on M&A and private capital transactions and provide market

assessments and benchmarking. As a close-knit team with a long history

together and a laser focus on our target markets, we help our clients sell

their companies, raise capital, grow through acquisitions, and evaluate new

markets.

We publish our sectorwatch, a review of M&A and operational trends in

the industries we focus.

1 - year revenue growth compared to revenue growth average for last 3 years - Current revenue

growth rate is less than the average of the last 3 years, indicating that the market may be flattening

or declining

Dashboard

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Wayside Technology Group 84 10 252 20.5% 13.1% 3.9% 0.3x 8.5x 275 915

ScanSource 831 90 2,638 -9.0% 11.2% 3.4% 0.3x 9.2x 2,200 1,199

PC Connection 1,100 87 2,590 -8.1% 16.2% 3.3% 0.4x 12.7x 2,598 997

ePlus 1,489 128 1,582 2.3% 24.5% 8.1% 0.9x 11.7x 1,586 998

Avnet 4,987 417 17,861 -3.7% 11.3% 2.3% 0.3x 12.0x 14,600 1,223

Synnex 5,766 1,208 24,676 3.9% 11.5% 4.9% 0.2x 4.8x 270,000 91

Arrow Electronics 9,753 1,083 28,673 -0.8% 11.1% 3.8% 0.3x 9.0x 19,600 1,463

CDW 25,214 1,677 18,468 2.4% 17.4% 9.1% 1.4x 15.0x 10,000 1,847

Public Basket

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6,153 588 12,092 0.9% 14.5% 4.9% 0.5x 10.4x 40,107 1,092

3,238 272 10,249 0.7% 12.3% 3.8% 0.3x 10.4x 6,299 1,098

share price as of 23Mar21

Public Basket

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Operational Metrics

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Operational Metrics

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Operational Metrics

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Valuation

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Valuation

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5x 9x 9x 9x 12x 12x 13x 15x

LTM

RG

R%

EBIT

DA(x

) EBITDA(x) LTM RGR%

5x 9x 9x 9x 12x 12x 13x 15x

LTM

GP%

EBIT

DA(x

)

EBITDA(x) LTM GP%

Valuation

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22-Mar-21 Tech Data Synnex 7200.00 36767.17 - -

16-Mar-21 Synapsys (Cape Town) Acronis - - - -

15-Mar-21 Infinigate Bridgepoint Advisers - 633.52 - -

25-Feb-21 Tek-Hut Ednetics - - - -

24-Feb-21 GovSource IDS International Government Services - - - -

18-Feb-21 Redcage Apax Partners (France) - - - -

11-Feb-21 System C CVC Capital Partners - - - -

04-Feb-21 Benchmark Technology Group Digital Check - - - -

01-Feb-21 Compass Computers Langley Business Systems - - - -

28-Jan-21 Fore A Partners Quest Technology Management - - - -

21-Oct-20 Boyum IT Volpi Capital - - - -

16-Oct-20 ADC Integrated Systems Inovity - - - -

13-Oct-20 WellSky Ardan Equity Partners - - - -

01-Oct-20 MAC Solutions (UK) SolutionsPT - - - -

01-Oct-20 Software Technology Resources Itancia - - - -

30-Sep-20 Ovexia 4CAD Group - - - -

01-Jul-20 Tech Data Apollo Global Management 6000.00 36767.17 0.16 8.48

19-Jun-20 GTI Software and Networking Esprinet 37.71 - 0.37 17.86

04-May-20 Change Healthcare (Connected Analytics) Kaufman Hall 55.00 - - -

30-Apr-20 Interwork Technologies Wayside Technology Group 4.40 - - -

15-Apr-19 Solytron Bulgaria ALSO 2.01 129.81 0.02 -

21-Nov-18 Diss ALSO 12.57 - - -

06-Nov-18 Smart Visitor Systems Vitec Software Group 3.56 - 1.36 9.13

04-Jul-18 Exclusive Networks Permira - - - -

28-Jun-18 DistriWAN ALSO 2.84 - 0.10 4.11

20-Jun-18 Client Solutions #VALUE! 29.22 - 1.12 -

Recent Transactions

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Public Basket

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The company operates through two reportable operating segments. The Lifeboat Distribution segment distributes technical

software and hardware to corporate resellers, value-added resellers, consultants and systems integrators worldwide. The

TechXtend segment is a value-added reseller of software, hardware and services for corporations, government

organizations and academic institutions in the USA and Canada. The company generates the majority of the revenue from

the Lifeboat Distribution segment. The company also operates a sales branch in Europe. The firm generates the majority of

its sales from the United States.

Wayside Technology Group

Public Basket

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Wayside Technology Group

Company Name Date Deal Synopsis

CDF Group 09-Nov-20 The company was acquired by Wayside Technology Group (NAS: WSTG) for $17.4 million on November 9, 2020.

Interwork Technologies 30-Apr-20The company was acquired by Wayside Technology Group (NAS: WSTG) for $4.4 million on April 30, 2020. The company will receive a

contingent payout of CAD 1.1 million upon the completion of certain criteria.

Public Basket

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The firm's operations are organized in two segments: Worldwide Barcode, Networking and Security, which focuses on

automatic identification and data capture, point-of-sale, networking, electronic physical security, and 3-D printing

technologies; and Worldwide communications and services, which focuses on communications technologies for vertical

markets including education, healthcare, and government. The company generates a majority of its revenue from the

Worldwide Barcode, Networking, and Security segment.

ScanSource

Public Basket

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ScanSource


intY 01-Jul-19 The company was acquired by ScanSource (NAS: SCSC) for GBP 49.1 million on July 1, 2019.

RPM Software 01-Dec-18 The company was acquired by ScanSource (NAS: SCSC) for an undisclosed amount in December, 2018.

Public Basket

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It provides products such as computer systems, software and peripheral equipment, networking communications, and

other products and accessories that company purchase from manufacturers and distributors. The company also offers

services involving design, configuration, and implementation of IT solutions. It conducts business operations through three

business segments namely Business Solutions, Enterprise Solutions, and Public Sector Solutions. The company generates

maximum revenue Enterprise Solutions segment.

PC Connection

Public Basket

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PC Connection


GlobalServe 12-Oct-16 The company was acquired by PC Connection (NASDAQ: CNXN) for an undisclosed amount on October 12, 2016.

Softmart 27-May-16The company was acquired by PC Connection (NASDAQ: PCCC) for $34 million on May 27, 2016. The acquisition is expected to be

accretive to PC Connection's earnings, excluding transition costs and the amortization of acquired intangibles.

Public Basket

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ePlus through its subsidiaries provides information technology solutions. The company's technology solutions enable

organizations to optimize their IT environment and supply chain processes. It also provides consulting, professional and

managed services and complete lifecycle management services including flexible financing solutions. ePlus focuses on

middle market and large enterprises in North America and the United Kingdom.

ePlus

Public Basket

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ePlus


Systems Management Planning 31-Dec-20

The company was acquired by ePlus (NAS: PLUS) for an undisclosed amount on December 31, 2020. The acquisition enhances ePlus'

footprint across the region, broadens its technology solution offerings especially in the areas of collaboration and supporting virtual

employees, and adds to its set of commercial, enterprise and state, local, and education customers.

ABS Technology (Certain assets

and liabilities)23-Aug-19

Certain assets and liabilities of Innovative Technology Systems & Solutions were acquired by ePlus (NASDAQ NGS: PLUS) for an

undisclosed amount on August 23, 2019. The acquisition establishes ePlus as a provider of consultative technology solutions in the

region and gives it a stronger foothold in commercial accounts, as well as in Healthcare, Education and Government vertical industries.

Public Basket

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The company's customer base is composed of original equipment manufacturers, or OEMs, electronic manufacturing

services, or EMS, providers and original design manufacturers, or ODMs. The firm operates in two groups--electronic

components and Farnell, the latter of which was acquired by Avnet in October 2016.

Avnet

Public Basket

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Avnet


Force Impact Technologies 26-Sep-19

The company raised $9.3 million of venture funding through a combination of debt and equity on September 26, 2019. Equity portion

of the funding was raised from Avnet and other undisclosed investors. An undisclosed debt amount in the form of convertible debt

funding was raised as a part of the funding.

Witekio 17-Sep-19

The company was acquired by Avnet (NAS: AVT) for an undisclosed amount on September 17, 2019. The combination of the

company's embedded software and design expertise with Avnet's technology ecosystem further strengthens Avnet's overall solutions

strategy.

Public Basket

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The company operates in a single segment, which is technology solutions. Technology solutions distribute peripheral, IT

systems, including data center servers and storage solutions; system components; software, networking, communication,

& security equipment; consumer electronics; and complementary products. Synnex distributes its products to more than

25,000 resellers, system integrators, and retailers. Its services include Systems Design and Integration Solutions, Logistics,

Cloud, Online, Financing, and Marketing. The majority of the firm's revenue is derived from the United States of America.

Synnex

Public Basket

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Synnex


Tech Data 22-Mar-21

The company reached a definitive agreement to be acquired by Synnex (NYS: SNX) for approximately $7.2 billion on March 22, 2021. The

transaction combines both company's core growth platforms to establish differentiated end-to-end solutions portfolio and product

offerings in growing product segments like cloud, data centers, security, Internet of Things (IoT), services, 5G, and intelligent edge. As a

part of the transaction, Apollo Global Management will receive an aggregate of 44 million shares of SYNNEX common stock plus the

refinancing of the company's existing net debt and redeemable preferred shares of approximately $2.7 billion. Upon closing, Apollo

Convergys 05-Oct-18

The company (NYSE: CVG) was acquired by Synnex (NYSE: SNX) for $2.27 billion on October 5, 2018. The acquisition enables the

acquirer to better serve the combined organization's increased scale, strong talent, best-in-class analytics, technology, and digital

offerings, and a shared commitment to helping them successfully navigate the increasingly complex CX ecosystem.

Public Basket

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The company operates in two segments: global components, which includes the sale of semiconductors, and global

enterprise computing solutions, which includes the sale of software, storage, and servers. Arrow primarily serves small to

midsize electronic equipment manufacturers and value-added resellers.

Arrow Electronics

Public Basket

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Arrow Electronics


Waggit 25-Jun-18 The company received $50,000 of grant funding from Arrow Electronics as part of the Arrow Certification Program on June 25, 2018.

Einfochips 08-Jan-18

The company was acquired by Arrow Electronics (NYS: ARW) for $327.628 million on January 8, 2018. The acquisition will enable the

acquirer to expand their sensor-to-sunset capabilities, by combining company's Snapbricks IoT framework, as well as by adding 1,500

IoT solution architects, ASIC and embedded engineers, and software development resources to their already leading position in IoT

design services.

Public Basket

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(95% of sales) and Canada (5%). The company has more than 100,000 products on its line of cards that range from

notebooks to data center software. Roughly half of CDW's revenue comes from midsize and large businesses, with the

remaining from small businesses, government agencies, education institutions, and health-care organizations.

CDW

Public Basket

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CDW


Aeritae Consulting Group 31-Dec-20 The company was acquired by CDW (NAS: CDW) for an undisclosed amount on December 31, 2020.

Southern Dakota Solutions 31-Dec-20 The company was acquired by CDW (NAS: CDW) for an undisclosed amount on December 31, 2020.

Contact Info

As a close-knit team with a long history together and

a laser focus on our target markets, we help our

clients sell their companies, raise capital, grow

through acquisitions, and evaluate new markets.

Securities offered through 7M Securities LLC.

Leroy Davis, Partner 704.899.5962 [email protected]

Tripp Davis, Partner 704.899.5762 [email protected]

Andy Johnston, Partner 704.899.5961 [email protected]

Simon Baitler, Executive Managing Director 310.829.1635 [email protected]

John Cooper, Managing Director 704.973.3996 [email protected]

Mark Landry, Managing Director 561.972.0609 [email protected]

Tim Frye, Senior Director 704.973.3994 [email protected]

Kristina Sergueeva, Director 704.899.5149 [email protected]

Ben Garber, Vice President 412.626.7898 [email protected]

Garth Martin, Vice President 704.973.3997 [email protected]

Nicholas Prendergast, Vice President 704.973.3995 [email protected]

Ariail Barker, Director, Sales & Marketing 704.981.2908 [email protected]

Ben Bruggeworth, VP, Business Development 704.365.8859 [email protected]

Steve Sypek, VP, Business Development 704.414.8736 [email protected]

Emily Halstenberg, Marketing & Sales Manager 704.409.9912 [email protected]

Alexis Papa, Marketing & Sales Coordinator 704.414.8732 [email protected]

Marty Johnson, Senior Associate 704.973.3999 [email protected]

Sydney Scadden, Senior Associate 704.973.3998 [email protected]

Steve Buffington, Associate 704.960.1828 [email protected]

Ilia Ulianchuk, Senior Analyst 704.414.8743 [email protected]

Nic Anderle, Analyst 704.826.7492 [email protected]

Robin Siegel, Analyst 704.285.8173 [email protected]

Conor Smith, Analyst 704.855.2134 [email protected]

Sawyer Willingham, Analyst 704.285.8171 [email protected]

sectorwatch: value-added resellers

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